PUBLIC LAW BOARD N0, 4402
PARTIES ) BROTHERHOOD OF MAINTENANCE OF
WAY
EMPLOYES
TO )
DISPUTE ) BURLINGTON
NORTHERN RAILROAD COMPANY
STATEMENT
OF CLAIM
1. The Agreement was violated when the Carrier assigned outside
forces to perform track undercutting work at Guersney, Wyoming,
beginning May 12, 1986 (System File WFJGr. DMWA 86-7-29).
2. The Agreement was violated when the Carrier assigned outside
forces to perform track undercutting work at Roxet, Wyoming,
beginning May 19, 1986 (System File WEIGr. DMWA 86-7-30).
3. Because of the violation referred to in Part (1) hereof, Grou 2
Machine Operators B. G. Kutschara, A. H. Magnason, L,
E
Haines and T. L. Anderson shall each "... be paid eight (8) hours
each day at their respective rate of pay begimung May 12,1986 and
continuing until the machine positions have been bulletined and
assigned to Roadway Equipment Operators. Claim to include any
overtime worked by the contractor's employes on the machines in
4. Because of the violation referred to in Part (2) hereof, Group 2
Machine Operators D. K. Liberg, D. A. Olbricht, G. L. Griffie and
W. L. Kudera shall each "... be paid eight (8) hours each day of
their regular work week plus overtime, if any, at their pro rata rate
of pay beginning May 19,1986 and continuing until said machine
positions have been assigned to roadway equipment operators."
()PINION OF
BOARD
Claimants are Group 2 Machine Operators in the Carrier's Roadway Equipment
Sub-DepartmenL By letter dated March 13, 1986, the Carrier's Chief Engineer 7. G.
Wood advised the Organization's General Chairman E. T. Torske of the Carrier's intent to
contract out certain undercutting work as follows:
This is to advise that Denver Region will be contracting track
undercutting with Plasser American Corporation for the 1986
undercutting program Undercutting will be done with four (4)
machines beginning May 12, and ending June 24, on locations on
the Third, Sixth, and Ninth Subdivisions of the Alliance Division.
If a conference is desired, please advise.
PLB 4402, Award 20
Contracting of Undercutting Work
Page 2
The parties met on April 4, 1986 to discuss the substance of the Carrier' s letter
without reaching agreement. On May 12, 1986 Plasser American Corporation commenced
performing track undercutting work utilizing two Plasser Undercutters beginning at
Guernsey, Wyoming with each machine requiring the services of two machine operators
employed by Plasser. Plasser commenced similar work on May 19,1986 beginning at
Rozet, Wyoming again using two Plasser Undercutters with the same compliment of nonCarrier machine operators. Through statements presented by the Organization, the
Organization asserts that undercutting work has always been perforated by Carrier machine
operators using Carrier-owned equipment or equipment leased from other firms. The
Carer does not dispute that its employees have performed undercutting work, but asserts
(without disagreement from the Organization) that it has long conuracted out this specific
type of undercutting work.
The Note to Rule 55 states:
The following is agreed to with respect to the contracting of
construction, maintenance or repair work, or dismantling work
customarily performed by employes in the Maintenance of Way and
Structures Department.
Employes included within the scope of this Agreement in the
Maintenance of Way and Structures Department, including employes
in former GN and SP&S Roadway Equipment Repair Shops and
welding employes-perform work in connection with the construction
and maintenance or repairs of and in connection with the dismantling
of tracks, structures or facilities located on the right of way and used
in the operation of the Company in the performance of common
carrier service, and work performed by employes of named Repair
Shops.
By agreement between the Company and the General Chairman,
work as described in the preceding paragraph which is customarily
performed by employes described herein, may be let to contractors
and be performed by contractors' force. However,
such
work may
only be contracted provided that special skills not possessed by the
Company's employes, special equipment not owned by the
Company, or special material available only when applied or
installed through supplier, are required; or when work is such that
the Company is not adequately equipped to handle the work, or
when emergency time requirements exist which present
undertakings not contemplated by the Agreement and beyond the
capacity of the Company's forces. In the event the Company plans
PL13 4402, Award 20
Contracting of Undercutting Work
Page 3
to contract out work because of one of the criteria described herein,
it shall notify the General Chairman of the Organization in writing as
far in advance of the date of the contracting transaction as is
practicable and in any event not less than fifteen (15) days pn or
thereto, except in "emergency time requirements" cases. If the
General Chairman, or his representative, requests a meeting to
discuss matters relating to the said contracting transaction, the
designated representative of the Company shall promptly meet with
him for that purpose. Said Company and Organization
representative shall make a good fifth attempt to reach an
understanding concerning said contracting, but if no understanding
is reached the Company may nevertheless proceed with said
contracting, and the Organization may file and progress claims in
connection therewith.
Nothing herein contained shall be construed as restricting the right
of the Company to have work customarily performed by employes
included within the scope of this Agreement performed by contract
in emergencies that affect the movement of traffic when additional
force or equipment is required to clear up such emergency condition
in the shortest time possible.
Also applicable is the Letter of Agreement dated December 11, 1981 providing:
During negotiations leading to the December 11, 1981
National Agreement, the parties reviewed in detail existing practices
with respect to contracting out of work and the prospects for further
enhancing the productivity of the carrier's forces.
The carriers expressed the position in these discussions that
the existing rule in the May 17, 1968 National Agreement, properly
applied, aequately safeguarded work opportunities for their
employees while preserving the carriers' right to contract out work
in situations where warranted. The organization, however, believed
it necessary to restrict such carriers' rights because of its concerns
that work within the scope of the applicable schedule agreement is
contracted out unnecessarily.
Conversely, during our discussions of the carriers'
proposals, you indicated a willingness to continue to explore ways
and means of achieving a mom efficient and economical utilization
of the work force.
The carriers assure you that they will assert good-faith
efforts to reduce the incidence of subcontracting and increase the use
of their maintenance of way forces to the extent practicable,
including the procurement of rental equipment and operation thereof
by carrier employees.
The parties jointly reaffirm the intent of Article IV of the May
17, 1968 Agreement that advance notice requirements be strictly
adhered to and encourage the parties locally to take advantage of the
PLB 4402, Award 20
Contracting of Undercutting Work
Page 4
good faith discussions provided for to reconcile any differences. In
the interests of improving communications between the parties on
subcontracting, the advance notices shall identify the work to be
contracted and the reasons therefor.
r
First, we agree with the Organization that track undercutting work in general falls
within the scope of the Agreement. As set forth in the Agreement, Group 2 Machine
Operators operate undercutters (Switch and Gopher). The Note to Rule 55 also specifically
designates coverage for employees who "perform work in connection with the construction
and maintenance or repairs of... tracks". Moreover, it is not contested by the Carrier that
in the past, covered employees have performed track undercutting functions.
Second, we disagree with the Organization that the Carrier's March 13, 1986 letter
violated the. notification requirements of the Note to Rule 55 and the December 11,1981
letter. Under those two provisions, the Carrier is obligated to give the Organization the
required advanced notice of its intent to contract out work and then, if requested, the
Carrier is obligated to engage in good faith discussions concerning "matters relating to the
said contracting transaction" with the design "to reach an understanding concerning said
contracting". We do not read that carefully drafted language to mean that prior to entering
unto a contracting arrangement the Carrier is obligated to negotiate over the basis for its
decision to contract out. Had the sophisticated negotiators who assembled these provisions
intended such a result, they could have clearly expressed such an intent. If, in the ensuing
discussions, the Organization can convince the Carnet not to continue with its plans to
contract out, so be it. But, we do not read these provisions to require the Carrier to bargain
about the decision to contract out prior to its making the contracting arrangements,
Therefore, the fact that the Carnet may have made prior commitments in this case to
contract out before giving the notice to the Organization
it.
and of itself does not require a
sustaining award.
Third, we disagree with the Carrier that in order to demonstrate a violation of the
contracting provisions in the Note to Rule 55 and the December 11, 1981 letter that the
PLB 4402, Award 20
Contracting of Undercutting Work
Page 5
Organization must show that work that has been contracted out has been previously
performed exclusively by the covered employees. The negotiated language governs work
"which is customarily performed by the employees" - not work that is "exclusively"
performed [emphasis added]. The analysis on this question is similar to the resolution of
the Organization's arguments concerning the notification requirements. Had these
sophisticated negotiators intended that these disputes were to be governed by the
exclusivity doctrine, they could have easily said so.' See e.g., Third Division Award
20633 between the parties (quoting Third Division Award 20338) "`... Additionally, we
observe that the Note to Rule 55 specifically alludes to work which is customarily
performed by the employes rather than the frequently argued doctrine involving work
exclusively performed"' [emphasis in original]); PLB 4370 Award 21, quoting Third
Division Award 24280 ("... Mhe Organization need not meet the burden of exclusivity of
work assignment ...."). Of particular interest is PLB 4768, Award 1 and awards cited
therein, which, although discussed in a notice context, makes the correct analysis
[emphasis in original]:
...[T]he Board takes guidance from Awards which
distinguish "customarily performed" from
"exclusively".
Citation of
only a few of these will suffice.
Third Division Award No. 26174 (Gold) states:
... While there may be a valid disagreement as to
whether the work at issue was exclusively reserved to those
employes, there can be no dispute that it was customarily
performed by Claimants.
Third Division Award No. 27012 (Marx) states as follows:
l The differenct between the definition of "customarily" and the more restrictive "exclusive" is
significant. "Customarily" Is defmed as "usual ... conventional, common, regular." "Exclusive" is defined
as "not admitting of something else; incompatible... shutting out all others."
The Random House
Dictionary of the English Language
(2nd ed.). Therefore, work can be "customarily" performed while not
being "exclusively' performed. Further, given the prior extensive use of the word "exclusive" in this
industry, the failure to include that language in the relevant agreements but rather using the word
"customarily" supports the conclusion that the parties did not Intend to apply the exclusivity principle to
contracting out issues.
PLB 4402, Award 20
Contracting of Undercutting Work
Page 6
The Board finds that the Carrier's insistence on an
exclusivity test is not will founded. Such may be the critical
point in other disputes, such as determining which class or
craft of the Carrier's employees may be entitled to perform
certain work. Here, however, a different test is applied.
The Carrier is obliged to make notification where work to be
contract out is "within the scope" of the Organization's
Agreement There is no serious contention that brush cutting
work is not properly performed by Maintenance of Way
employes, even if not at all locations or to the exclusion of
other employees . ...
Therefore, we fund that the Organisation need not demonstrate exclusivity to prevail
under the Note to Rule 55 and the December 11, 1981 letter. The exclusivity principle is
for analysis of disputes determining which class or craft of the Carrier's employees are
entitled to perform work and is not relevant to contracting out disputes. The Organization
must, however, demonstrate that the employees have "customarily performed" the work at
issue. Given the descriptions of undercutting work found in the Agreement and further
given the statements of the employees submitted by the Organization showing the extent of
that work previously performed, we find that the Organization has demonstrated that the
employees have "customarily performed" undercutting work.z
Fourth, we disagree with the Organization that the Cosier did not act in good faith
in this matter as contemplated by the Note to Rule 55 and the December 11, 1981 letter.
The Organization misplaces the burden of demonstrating the existence of good faith or lack
thereof. This is a contract dispute. As such, before the burden is shifted to the Carrier to
demonstrate that its actions were in good faith, the initial burden is upon the Organization to
make a showing that the Carrier acted in bad faith. All that has been shown by this record
is that prior to discussing the matter with the Organization the Carrier (as in the past) may
have decided to contract out work now claimed by the Organization. While that conduct
may ultimately violate the limitations upon contracting out as the factors in the Note to Rule
Z
We recognize that there is a split in authority on this question and that awards exist requiring a
demonstration
of
exclusivity. However, we believe that the basic principle
of
contract construction
discussed above concerning manifestation of intent through the clear language
of
"customarily" rather than
"exclusively" along with the rationale of those awards that do not adopt the exclusivity requirement are the
better reasoned approaches to this question.
' PLB 4402, Award 20
Contracting
of
Undercutting Work
Page 7
55 are applied, those facts alone do not establish that the Carrier acted in
bad
faith.
Fifth, we disagree with the Organization in this case that a sustaining award is
required because exclusivity and alleged
lack of
qualification of the employees were not
mentioned in the March 13, 1986 notice by the Carrier as "reasons" for the contracting
under the provisions of the December 11, 1981 letter. While lack of exclusivity may be a
defense that the Carrier argues in these kinds of cases, that defense is not a "reason" for
contracting out
work
as contemplated by the parties December 11, 1981 letter. Those
negotiated "reasons" concern the factors in the Note to Rule 55 regarding special skills,
equipment or material, not being adequately equipped to handle the work and emergency
time requirements. Similarly, in this matter, an alleged lack of qualification of the
employees (while required as a reason in the December 11,1981 letter) has not been the
designated primary basis before this Board for the Carrier's contracting out the work in this
matter. Rather, while the Carrier did raise the question on the property (see Carrier Exh.
6), before this Hoard the Carrier has focused upon the assertion that the Plasser
Undercuttrx is "special equipment not owned by the Company" as set forth in the Note to
Rule 55 3
Sixth, having previously found that the employees have "customarily performed"
undercutting work, we next t;rrn to the factual questions that these cases will hinge upon as
set forth in the enumerated factors in the Note to Rule 55. The dispute centers around the
use the Plasser American Undereutter which is described by the Carrier (Carrier Exh. 4) as
3
while the special equipment factor was also not specifically designated in the Carrier's
notification, the record shows that this reason was discussed in the parties' April 4, 1986 conference and In
subsequent correspondence. See Carrier
Exhs.
4 and 6. Given the extent
of
discussion on the special
equipment factor, we are unwilling to sustain this claim on the sole basis that the Carrier did not
specifically identify that particular "reason". The requirement in the December 11,1981 letter to give
reasons is in "the interest
of
improving communications". While we certainly can envision a scenario
where a carrier's failure to give reasons could effectively handcuff the organization in its ability to address
the issues raised after receiving notification of a contracting out of work, given the extent of discussions on
the special equipment factor demonstrated
by
this record, the intent of the December 11, 1981 letter to
improve communications has been satisfied. We cannot say that such an omission · which is, at best,
technical violation - requires a sustaining award in this case.
In the
future, the Carrier ghoufd specify its
reasons for contracting out as required
by
the December 11,1981 letter - indeed, that is what it is required to
do when giving notification, But, given the totality of the circumstances, the Carrier's failure to do so in
this case is not fatal to
rha
Carrier's position.
PLB 4442, Award 20
Contracting of Undercutting Work
Page 8
"a large machine which is designed for high speed out of face production" when compared
to the switch undercutter and gopher undercuttcr listed in Rule 5g. Descriptive material
from Plasser (,Carrier Exhs. 1 and 2) describe the Plasser American Undercut= as a
machine that:
... performs both on heavily fouled ballast and on modern high
speed lines. An alternative
to
sledding operatiotrs due to the savings
generated by reclaiming cleaned ballast, Tire unit is equipped with a
lifting and slewing dovrce
to
induce the excavation depth or to avoid
obstacles and hold the line, A second slewing device toward the
rear of the machine is used for any additional lining corrections
needed. Available with a switch cutting capability which increases
its usefulness as switches may be cut during other undercutting
operations by inserting additional cutting links.
On the other hand, the Trac-Gopher, owned by the Carrier and operated by the
employees (Carrier Exh. 2) has
a
more limited clearing function than the Plasser
Undercutter in that it:
... is designed to undercut and remove ballast at crossings, bridge
approaches, and in cemented ballast areas, The
GO-4's
digging
wheel trenches through ballast or asphalt to
a
depth of 41-in. below
the rail. Advance excavation
is
eliminated.. Cutter bars of 9-ft. or
12-ft. length loosen ballast which is removed on 13-ft. or 21-ft.
conveyors. The GO-4's can operate in tunnels, at switches and in
double track areas. It also cuts pipe or cable trenches. The compact
size allows
for unrestricted highway travel on flat beds or Tamper's
highway trailers.
Here, the Carrier asserts that "The reason for the contracting was that the Carrier
did not own or desire to purchase this type of specialized equipment. In addition, this
undercutter cleaner machine was not available for lease from any of the three construction
companies that own/operate this type of equipment." Carrier Submission at 2. The
Organization responds claiming that the Plasser Undercutter is doing exactly what
Maintenance of Way forces have done since rock was first used as ballast in tacks with
men using shovels, sled or the Cribex, Ballastex or Screenex machines covered by Rule 5
of the Agreement. See letter of January 9,1987 (Carrier Exh. 10) and supportive
employee statements. The Organization further points out that undercutting positions have
been bulletined
PLB 4402, Award 20
Contracting of Undercutting Work
Page 9
The Carrier, in turn, replies by stating (Carrier Exh. 12) in its February 7,1987
letter .
... Mhere is a vast diffemnce between the undercutter ballast
cleaner involved in these claims and the undencutter machine listed in
Rule 5G which only removes the dirty ballast from under the track
which then requires total replacement of the ballast with new
materiel. However, the undercutter ballast cleaner machine removes
the old fouled ballast from under the roadbed, then cleans the ballast
and places the cleaned ballast back under the track. Undercutter
ballast cleaners are not listed under Rule 50 as the Carrier does not
own such machines. Undercutter ballast cleaners have been use don
the Chicago and Denver Regions since 1957 and at all times such
machines have been leased with an operator furnished by the
contractor who owns the machine.
To further support its position, the Carrier points to its letter of February 13, 1987
(Carrier Exh. 13) which states that "out-of-face undercutting of track requires large
specialized equipment not available among the normal complement of railroad equipment"
and its letter of July 6, 1987 (Carrier Exh. 14) attaching statements from Plasser American
Corp., Knox Kershaw, Inc. and R. J, Corman Railroad Construction Company which
indicate that their machinery is unavailable to the Carrier under any circumstances for
operation by other than contractors' employees (due in part to the limited number of these
machines available in the United States).
Considering the above evidence regarding the type of machinery at issue and its
function, we find that the Plasser Undercutter is not owned by the Carrier; is not the precise
type of machinery that is ordinarily operated by the Machino Operators: performs mare
complex functions in the cleaning of ballast than the machinery owned by the Carrier and
operated by the employees - particularly the cleaning and replacement of the ballast as
opposed to the mere removal of the ballast; and such machinery is not available for lease
without use of contractor forces. Under the facts of this case, we therefore find the Plasser
Undercutter to fall under the "special equipment not owned by the Company" factor set
forth in the Note to Rule 55. We further find that by using an outside contractor in these
circumstances where these machines were unavailable for leasing without the contractor's
PLS 4402, Award 20
Contracting
of
Undercutting Work
Page 10'
forces, the Carrier did not violate the terms of the December 11,1981 letter which requires
"the use of... maintenance of way forces to the extent practicable, including the
procurement of rental equipment and operation thereof by carrier employees'
:4
We must caution the Carrier, however, that should circumstances change and the
present unavailability of this type of undercutting equipment which has caused the lack of a
leasing market also change so that in the future this type of equipment is more readily
available for rental, we cannot say that the outcome of a similar future claim will be the
same. We are satisfied by this record that the Carrier's employees are capable of being
trained to operate this type of equipment and, as such, the provisions of the December 11,
1981 letter requiring "the procurement of rental equipment and operation thereof by carrier
employees" will become operative.
Themfore, limited to the particular facts before us, we
shall
deny this claim.
AWARD
Claim denied.
[:~,
kzwm.ki.
Beim
Neutral Member
E. 1. KL~um= F. S. Swanson
/
Carrier Member Organization Member
Denver, Colorado
January 15, 1991
4
The fact that in October 1985 the Carrier teased the kind of equipment at issue in
this
case
without
contractor operators does not dictate a different result. The record establishes that such a leasing
arrangement occurred on one occasion only and, as
a
result of that twang
ammgemae4
the lessor was sued
and enjoined for violating a non-competition agreement. See Carrier Exh. 14. If anything, this i11-fated
attempt at leasing this kind
of
equipment for use by Caaiet employees underscores the lack of availability
of
this equipment for less&
Concurrence to Award 20 of Public Law Board 4402
Even though there is much in this Award that is of value in clarifying the issue of
what constitutes a valid notice of contracting out, and the right of the Carrier to take
advantage of modern equipment, some aspects of the Award are very problematic
and should not pass without comment.
The Award properly found that the Carrier served a valid notice of contracting (p. 4),
that there was sufficient proof of the presence of one of the specified criteria under
which contracting out is appropriate (p. 9), and that the requirements for discussion
with the general chairman were met (p. 4). Having thus found that all possible
Carrier obligations and employee rights under the Note to Rule 55 had been satisfied,
there were no more issues concerning that Rule to deal with. Therefore, since the
question of whether the Carrier could have elected to contract out the work without
notice to the Organization was not in issue, the entire discussion of whether the
"exclusivity" standard governs the determination of when contracting out notices are
or are not required, must be considered
obiter dictum.
It may be that inclusion of the discussion concerning "exclusivity" was influenced by
the Carrier's extensive argument on the subject. Nevertheless, we believe that the
argument, no matter how inelegantly presented, should have been recognized as an
argument in the alternative made necessary by the Organization's technical attacks
on the validity of both the notice and the criteria. (Indeed, the Award seems to
recognize the nature of the argument in the second full sentence at the top of page
seven.) We would make no further comment on that subject if the practical effect of
eliminating the exclusivity standard from contracting was not a radical alteration of
the respective parties scope rule rights and obligations, and if the Award had not
treated the matter as if it were a controlling issue, with the resulting wrongful
implication that the discussion is authoritative and final. As Referee William M.
Edgett cautioned in Third Division, NRAB Award No. 18773,
BMWE v. N & W:
"Questions should be determined by the Board on a case by case basis and not by
broad general pronouncements. In other words the Board should decide the case
actuary before it. It should not attempt to lay down rules or propositions as to
possible or probable issues, for the guidance of parties not before it, on issues
which may arise in the future under a different state of facts."
To conclude as the Award does on page 6, that exclusivity applies only to
jurisdictional disputes between crafts and not to contracting out, involves a radical
alteration in the scope rule with serious consequences which are not apparent
-1-
~I~fO~-.20
without a careful walk through the practical outcomes. It must be kept in mind, that
at the time in 1952 that the contractual language which now appears as the Note to
Rule 55 was originally negotiated,' the parties were, and had always been, governed
by the exclusivity doctrine for all scope rule purposes, including both inter-craft
jurisdictional disputes and contracting out. Applying the alteration of that situation
adopted by the Award to the types of track work involved in the instant case, results
in notice of contracting having to be served in many cases that the parties had not
bargained for. While contracting out can almost always be justified in this type of
work because one of the criteria justifying contracting is almost always present, there
is still a serious problem for the Carrier, because it creates the potential for both
technical violations if serving of notice is inadvertently overlooked, and where
notices are actually served, it creates an opportunity for the very type of technical
attacks made by the BMWE in the instant case.
However, those problems pale compared to the mischief created by altering the scope
rule interpretation for types of work, such as right of way fencing (before this Board
in another case), where the work is sometimes performed by maintenance of way
employees, but a substantial percentage of the work has also been traditionally
performed by a variety of outside parties, for compelling reasons having nothing to do
with the criteria set out in the Note to Rule 55. Since such work had always been
interpreted as being outside the scope rule under the exclusivity standard, the parties
did not expect such types of work to fall under the contracting notice requirements,
(unless, of course, by some future mutual agreement), and no provision was made for
an exception or additional criteria when the language of the Note to Rule 55 was
negotiated. When a requirement for notice of contracting is imposed on such types of
work by arbitral interpretation, the contracting out is no longer possible in any
1. The text and negotiating history of the original 1952 Northern Pacific agreement, which was
readopted verbatim in 1962, were included in Exhibit 16 attached to the Carrier's submission. The
BMWE exercised its option to retain that agreement in lieu of Article IV of the May 17, 1968 National
Agreement. After the 1970 merger, the text of the Northern Pacific letter agreement, with only a few
insignificant changes in wording and punctuation, except for the addition of specific language
concerning the amount of time for notice, was adopted as the Note to Rule 55 in the BN agreement.
(The understanding of the negotiating parties was that, unless otherwise specified, the interpretations
applicable to each rule prior to merger were adopted with the rule.) The addition of the notice
language was not a further restriction on the Carrier, because the previously existing conference
requirement obviously included an implied requirement for notice. In fact, the specific time of 15 days
was insurance against the potential of receiving an interpretation that the agreement implied a longer
advance notice to allow time for negotiations. The addition of that language can in no way be
construed as adoption of Article IV of the May 17, 1968 National Agreement, as the BMWE has
contended.
LrqL)a
-a-o
circumstances where one of the criteria justifying contracting is not present, so the
scope rule has been radically expanded in favor of the Organization just as surely as if
the language of the rule were amended. In either of the examples, the result is
beyond the jurisdiction conferred upon this Board by the Railway Labor Act,
The Award justifies its conclusion concerning the exclusivity standard, by citing a
small sample of the many awards on this subject, and the proposition that the parties
"could have easily said so," if they intended that contracting out was to be governed
by the exclusivity doctrine. Addressing the second proposition first, its superficial
logic is deceptively attractive until we are reminded that, an observation more
consistent with the principles of contractual construction, would be that the parties
"could have easily said so" if they intended to adopt a radical change in the scope rule
application, such as that found in the Award. However, in the instant case we are
not left to glean the intent of the parties by mere reasoning and deduction, for only
one month after negotiating the original 1952 letter agreement, the parties
disavowed any intent to change the application of the scope rule, by entering into
another letter agreement of interpretation reading as follows:
"Practices concerning the performance of work in connection with construction,
maintenance or repairs, or dismantling of, tracks, structures or facilities in the
Bridge and Building Sub-department and in the Track Sub-department of the
Maintenance of Way Department, are not changed by the agreement effective
April 1, 1952: "
The Award's assumption that the word "exclusive" was the only word in the language
available to the parties to indicate an intention to leave the scope rule undisturbed, is
rationalized on two grounds stated by the Award in the footnote on page 5. The first
observation in that footnote, finds a critical distinction between a certain dictionary
definition of the words "customarily" and "exclusive." Ignoring for the moment that
such a distinction is directly contrary to the 1952 letter of interpretation quoted
above, there is simply no evidence to believe that the parties who negotiated the rule
in question were laboring under any such dictionary definitions. In fact, we are still
in possession of the copy of the dictionary, Websters New International Dictionary,
Unabridged (2nd ed.), which was used in the Northern Pacific labor relations office
where the original language in question was negotiated. That universally accepted
authority defines "customarily as "1 agreeing with, or established by custom;" and it
defines "custom" as "1 a form or course of action characteristically repeated under
like circumstances; a usage or practice... 3 law, long-established practice considered
as unwritten law and resting for authority on long consent; a usage that has by long
-3-
qq nL
ao
continuance acquired a legally binding force..." The latter definition, of course,
places the parties' use of the term "customarily performed" squarely consistent with
an intent to retain the "exclusivity" doctrine.
The second observation in the Award's footnote concludes that the parties use of the
term "customarily" indicates an intent not to apply the exclusivity principle to
contracting out issues, "given the prior extensive use of the word `exclusive' in this
industry." That observation was obviously made uninformed of the fact that the only
such extensive use of the word "exclusive" was in arbitration awards interpreting
general scope rules, none of which actually contained the word "exclusive." Because
of that history the word "exclusive" in a scope rule context became anathema to the
vocabulary of railroad union representatives. Therefore, the proper conclusion is
exactly the opposite of that stated in the footnote, because the parties had to find a
word other than "exclusive" in order to reach a mutually acceptable agreement.
To close the discussion on the exclusivity subject, the Award ignores the line of
arbitral authorities which have interpreted the Note to Rule 55, in situations where
the notice question was actually in issue, and singles out as its guiding authority
Third Division NRAB Award
20633
(Lieberman) and Award
20338,
issued by the
same arbitrator on similar facts. It is most interesting that the discussion of the
exclusivity issue in both of those awards is even more clearly dicta than the
discussion in the instant case. Both of those awards involve the former SP&S
territory where, as the awards somewhat vaguely point out, language of a very
unusual rule (which the parties clearly intended to supersede in adopting the BN
Schedule Agreement), have been held to give BMWE exclusive scope rule coverage
over the work in question. In addition, in both cases, evidence of exclusive practice
was held to be undisputed, and that was sufficient to require a notice under any
definition of the term "customarily performed." The fact that those awards went on
to speculate about whether or not notice would have been required had there been
evidence of mixed practice, renders the discussion totally without authoritative
standing. See also the criticism of those two awards on additional grounds in Award
No.
8
of Public Law Board No.
2206,
BMWE v. BN, (Eischen).
Only one of the other awards cited, Award 1 of PLB
4768,
involves the Note to Rule
55. There is no justification for following that award, even though the the notice
requirement was in issue, because without any rational basis it rejects settled
authority on this property to apply the standards from awards on other properties
which, correctly or incorrectly, interpret a different rule entirely. It should be noted
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that the foreign carrier awards followed by Award 1 ofPLB 4768, as well as those
followed by the instant Award, involve a rule which contains additional language
which could arguably support a more stringent notice requirement, and which
doesn't carry the unique history, years of practice and the line of local arbitral
authority applicable to the Note to Rule 55. Therefore, those awards are not in point
in the least, and they are not valid authority to support either Award 1 of PLB 4768,
or the conclusion of the instant Award on this subject.
Another matter which was properly in issue in the case and correctly decided, but for
the wrong reason, was the Organization's contention that the December 11, 1981
Hopkins-Berge National Letter of Agreement creates some kind of good-faith test
which the Carrier must meet in each contracting out transaction. While the Award
properly holds that there was no evidence of bad faith on the part of the Carrier in
this case, the Award unfortunately appears to accept the underlying test theory-again, I fear, due to confusion caused by the manner in which the issue was argued.
We will not attempt to present a fully comprehensive explanation of this issue, but
we must point out that the quotation of the Hopkins-Berge letter in the Award omits
the vital fourth, fifth and sixth paragraphs of the letter, in which the parties provide
a process by which existing agreements were to be modified in order to provide the -
consideration for the undertakings outlined in the other paragraphs of the letter.
These omitted paragraphs provide for a joint committee to be impanelled to
recommend changes in existing agreements to provide, among other things, "more
flexibility in the utilization of such employees," to facilitate the utilization of railroad
employees instead of contractors. Even though this commitment for enabling work
rule changes is repeated three times in the letter, the BMWE refused to cooperate in
creating the joint panel, and the contemplated work rule changes to enable a
reduction in contracting out were never delivered. Therefore, the entire 1981
Hopkins-Berge letter is null and void and unenforceable by the BMWE under either
the principle of failure of consideration or estoppel.2
2. Proof that the parties themselves considered the 1981 Hopkins-Berge letter a dead issue, is Article
VIII of the October 17, 1986 National Wage Agreement, in which the parties provided a special
exception to the moratorium on progressing Section 6 notices, by allowing local notices concerning
contracting to be served by the BMWE, conditioned upon concurrent handling of carrier notices "that
would achieve offsetting productivity improvements and/or cost savings." Failure of the parties to
settle such a dispute in mediation was to be followed by a different type of joint Advisory Fact-Finding
Panel including two public members appointed by the NMB. (Not surprisingly, no carriers achieved
any work rule changes in the resulting local negotiations.)
4'~ --) 0
Lit),
Even if the Hopkins-Berge letter could be considered to have any continuing life, the
Organization's attempts to enforce their good-faith test could and should be rejected
for one or more of the following additional reasons:
(1) The Organization's good-faith test amounts to an invocation of equity which
requires the Organization to have clean hands. The Organization's duplicity in
handling its commitments under the Hopkins-Berge letter is disqualifying. -
(2) The notification requirements of the eighth paragraph of the letter specifically
applies only to Article IV of the May 17, 1968 National Agreement, which was not
in effect in the instant dispute.
(3) The good-faith assurances contained in the seventh paragraph of the letter
obviously describe the totality of a carrier's treatment of the contracting situation,
and there is no basis for invoking a good-faith`;test on an individual transaction
basis.
This brings us to the final problem with the Award, the warning on page 10, which
states, "We are satisfied by this record that the Carrier's employees are capable of
being trained to operate this type of equipment. ." if it should become available for
rental without contractor operators. Contrary to the statement in the Award, the
conclusion is totally uninformed by any relevant evidence in the record, since it was
not in issue. If this matter had been in issue, we would have presented evidence
proving that the existing seniority and assignment rules would make it impossible to
assure the availability of trained operators for the small number of machines of this
type which would be used at any one time, even if hundreds of employees were sent to
training, and that the Organization has refused to alter the existing seniority and
assignment rules in any way. Since the Organization made clear commitments in the
sixth paragraph of the 1981 Hopkins-Berge letter agreement to change existing
seniority and work rules to accommodate the reduction of dependence on outside
contractors, this is an excellent example of why the BMWE has no basis to invoke any
of the provisions in the 1981 Hopkins-Berge letter agreement until it begins to honor
its own commitments.
Eino J. Kallinen, Carrier Member
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